Cabot O&G in 2012: Membership in 2 Different “1 Billion” Clubs

1 billion The 2012 reports continue to roll in. Cabot Oil & Gas has just reported its 2012 report and the results are extraordinary. Cabot joined two different “1 billion” clubs in 2012. First, they surpassed $1 billion in revenues for 2012, earning $1.2 billion. Second, they became the first (and so far only) company to achieve 1 billion cubic feet of natural gas production per day in the Marcellus Shale (see Who’s a Member of the Marcellus “1 Bcf/d” Club?).

Companywide, Cabot’s natural gas production was up an astonishing 43% over 2011, much of that from their drilling in Susquehanna County, PA. Cabot is a great company run by great people, and they have a lot to be proud of when it comes to their performance last year. Here’s the numbers and the rundown for Cabot in 2012:

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Chesapeake 2012 Update: Revenue Down $940M, Gas Production Up 9%

Chesapeake Energy issued it’s fourth quarter 2012 and full year 2012 financial and operational update yesterday (full report below). This is a big deal because Chesapeake is the #2 natural gas producer in the U.S. behind Exxon Mobil. The company is also the biggest driller in the Utica Shale and one of the biggest in the Marcellus Shale.

What does the update show? The company lost $940 million in 2012, which was expected. In early 2012 Chesapeake made noise about curtailing output until the commodity price of natural gas went up. So much for that: Production increased 9% from the end of 2011 to the end of 2012—to an average of 3.9 billion cubic feet of gas per day.

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Chesapeake Energy Strikes Oil Again, This Time in WV

Chesapeake Energy announced in July 2011, to great fanfare and shouts of joy, that it had hit oil in the Ohio Utica Shale (see Major Discovery – Chesapeake Energy Strikes Oil (and Gas) in Ohio’s Utica Shale). Although early results were promising, by the end of 2012 Chesapeake admitted it had “misjudged” the Utica Shale fairway—the best places to drill—and their early enthusiasm seems to have subsided (see Chesapeake Admits Misjudging Ohio Utica Sweet Spot).

But perhaps Chesapeake has reason to smile again. Chesapeake has hit oil—in the West Virginia Marcellus Shale:

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Chesapeake Still Loves the OH Utica Shale – 2012 Year in Review

Estimating that it will recover 5 to 10 billion cubic feet of natural gas equivalents from each well drilled in the Ohio Utica Shale, Chesapeake Energy says they still love the Ohio Utica Shale, even if oil isn’t a big part of the picture.

Chesapeake held an earnings call yesterday to discuss 2012 numbers with analysts. Akron Beacon Journal reporter Bob Downing listened in:

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PA DEP Sec. Krancer Faces Tough Questions from Senators

MDN loves Pennsylvania Dept. of Environment Protection Sec. Michael Krancer—primarily because he doesn’t take any guff from politically posturing Democrats. He also happens to be very smart and very funny. Krancer faced a grilling yesterday during budget hearings from (some) PA senators who wanted to score political points. Krancer fired right back when challenged. He also refused to answer questions about his religious beliefs on global warming. It’s dangerous to go against GW orthodoxy. You’re branded a heretic and imbecile if you’re not a Kool-Aid drinker of the GW mythology.

Below is some of the back and forth from yesterday’s budget grilling of Krancer. He addresses the topic of Marcellus Shale drilling and the DEP’s ability to regulate it. He also answers an interesting question about “asexual behavior” in fish…

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MarkWest: We Just Banked $450M from EMG, Another $2.8B Available

A couple of weeks ago MDN told you the news that MarkWest Energy and Utica Shale joint venture partner EMG had struck a deal to infuse extra cash into their Utica projects which seemed to be running low on money (see Cash Runs Low – MarkWest Floats $150M Loan in Utica Midstream JV). MarkWest issued another press release yesterday to say the deal with EMG is now done, and an extra $450 million will soon be in the bank from EMG to keep the Utica projects going.

Also in yesterday’s announcement, MarkWest says they’ve raised $1.5 billion over the past three months from “debt and equity transactions” including the $450 from EMG; they still have an untapped $1.2 billion line of credit; and they have the ability to issue $600 million in common stock, should they need to (a $3.3 billion pile of cash from all sources). Translation: MarkWest seems to be allaying investor concerns about cash flow problems for their active projects. “No overextension happening here,” seems to be the mantra.

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WV NatGas Vehicle Task Force Releases 17 Recommendations

In June 2012, then acting (now newly elected) WV Gov. Earl Ray Tomblin appointed a 21-member Natural Gas Vehicle Task Force with the mission of providing a road map for converting at least part of the state’s fleet of vehicles to run on natural gas (see WV Task Force Investigates CNG for State Vehicles).

The task force met, talked, researched and did their job. Yesterday, Gov. Tomblin released a 38-page report containing the task force’s recommendations along with loads of other useful information including helpful maps (a full copy of the report is embedded below). Here’s a quick list of the task force’s 17 recommendations:

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Shale Wastewater Operator Proposes Marcellus Gas-to-Liquids Plant

American GTL Energy wants to build a gas-to-liquids (GTL) plant in the Pennsylvania Marcellus Shale to convert methane (“dry gas”) into diesel fuel. Such a plant, if built, would require about $1 billion of investment—so American GTL is trying to catch the interest of companies like Exxon Mobil—companies with deep pockets.

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Drilling Company CEOs Talk up WV Marcellus Shale at IOGA Meeting

The heads of several drilling companies spoke this week at the West Virginia Independent Oil and Gas Association (WV IOGA) in Charleston. They gushed with praise for the Marcellus Shale in West Virginia.

Among the speakers were the CEOs of Gastar, PetroEdge and EnerVest. A few of their comments:

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